The Magic Number For A Beginner in Real Estate Investing

Remember the MAGIC NUMBER. That is number 2. Why number 2?

First, make sure that you keep your full-time job for a minimum of two years with the same company. If engaged in business, you must prove that your business was profitable for the past two years.

Second, open two or more accounts with only one bank.

Third, get to know the branch manager and officers of your bank. Say "Hello" when you come in and "Have a nice day" just before you leave. Moreover, start to build credit with your bank by applying first for a credit card. You should prove that you are a good credit card holder for at least two years. Then get two or more credit cards.

Fourth, as your savings grow higher and higher, apply for smaller loans like Personal Loans. Your goal here is to show to the bank that you are a good customer and a good risk for them. Again, never make late payments for two years.
Fifth, You can now apply for a housing loan. Again, establish a good credit standing by never failing to pay your monthly amortization for two years.

If you have done the MAGIC NUMBER above, you can qualify to apply loan to buy the property of a motivated seller, to apply a loan take-out to buy foreclosed properties from other banks, to apply for another housing loan,a business loan, a stand-by credit line or other form of investment debt.

Establish AAA Credit in 30 Days: In Preparation For The Leverage of Investment Debt

To work this plan you need at least Php 20,000.00 to begin. You should borrow this from your friends if necessary. Then go to a bank of your choice and deposit the Php 20,000.00 into a regular passbook savings account.

Wait a few days for the account to be posted and return to the bank to ask for a Php 20,000.00 loan - you offer the passbook as collateral. Since the bank is already holding your Php 20,000.00, you go to another bank open a savings account lending you another Php 20,000.00 and they won't even make a credit check. Then, with your borrowed Php 20,000.00, you go to another bank, open a savings account, return a few days later, borrow Php 20,000.00 from that bank using your passbook as collateral.

Then repeat the process at a third bank with your borrowed Php 20,000.00. Wait a few days to go to a fourth bank where you open this time a CHECKING account. Wait a few days and make a payment on each of the other three loans. A week later, make payments again on the three loans, and continue paying each week until you have almost paid off the balance.

A credit investigation at this point will show you with three active bank loans (which are considered hard to get), a checking account, and a paying history for the three bank loans - with you having paid up in advance. Thus, you have AAA credit in as little as 30 days. From here you go on to apply for loans, credit cards, and other items on credit.

Then, when you established AAA credit history from your credit cards, you will be able to qualify for a housing loan.

Check-List Before Buying Real Estate in the Philippines

Here are the tips a buyer must remember before buying any property in the Philippines, specially if you are buying a single property from an individual:

1. Make sure the "Transfer Certificate of Title" is authentic.  The easiest way to check if the title to the property you are buying is authentic is by getting "Certified True Copy" of the title from the Register of Deeds. This office is usually located at the city or municipal hall where the property is located. Ask the seller of the property for a photocopy of the title -you will need the title number and the name of the owner to get a certified true copy of the title from the Register of Deeds.

2. Verify that title is clean - meaning the property is not mortgaged (no liens & encumbrances on the property). You can see that at the back of the title with the heading "Encumbrances". This page must be empty if you are told that the title is "clean".  But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the "Encumbrances" page, this is of course all right.

3. Make sure that the land described on the title is really the land that you are buying. You can validate this at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don't have any street name and number to pin point a property, it is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.

4. Make sure that the sellers are the real owners. If you are buying from an individual property owner, ask for identification papers like passport or driver's license, it is also a good idea to talk to the neighbors to confirm the identity of the sellers (you might as well ask some history of the property).

5. Confirm that the yearly real estate taxes are paid.  Ask for a copy of the Tax Declaration and Tax Receipts to confirm that real estate tax payments are up to date.

If the above check list is in order, it is safe to proceed with the purchase.

Thinking of Getting a Bank Loan? Do Your Homework First!

Thinking of Getting a Bank Loan? Do Your Homework First!

If you are a start-up entrepreneur, getting a bank loan is like going through the needle. It is tough, but not totally impossible. You just need to do your homework well. Here are the kinds of preparation you need to do to increase the chances of getting that bank loan approved.
Borrowing to start a business is not easy. Getting a bank loan, particularly for a start-up business and a newbie entrepreneur, is like going through the needle. More so if your business is home-based and on the Internet.

Banks favor an established businessperson with a solid credit rating, a sizeable bank account, experience in the business they propose to enter, and business plans that show the ability to repay the loans. If you are not one, then you need to double your preparations to convince the banker to lend you that much needed start-up capital. If your business is a start-up, bankers will need to know as much as possible about you and your business. Lenders will ask for an awful lot of questions, and it takes a great deal of work to put it all together.

However, many small business owners often make the mistake of not being adequately prepared when going to the bank to the loan. Surprisingly, many loan applicants don't even have the slightest idea how or when they intend to repay the money they requested. Often they don't even know how much money they need. When asked how much money they want to borrow, many people give these two common responses: "How much money can I get?" and "As much as possible." Is it any wonder that lenders say no?

The bottom line is that it pays to do your homework before you ask for a loan. Bear in mind that the probability of getting your loan approved goes up if the degree of risk associated with lending you money goes down. To lower your risk and improve your odds of getting the loan, you need to anticipate the question lenders will ask you. You need to present your banker insights into your business that may enable him or her to easily approve your loan. For example, prior to filling out a loan application, you should know:

1. Exactly how much money you need? Be as exact as possible, adding a little for contingencies and the unforeseen extra expenses.

2. How you plan to use the money? Telling the banker that you want a loan to "have working capital" to the fastest way for your loan to be denied. There are only three things you can do with a loan - to buy new assets, pay off old debts, or to pay for operating expenses. Be specific as possible.

3. How long it will take you to repay the loan? Your cash flow projections will help you formulate a repayment time frame for the loan. This is the time when you need to convince the banker of the good potential of your business and its long-term profitability.

4. What rate of interest rate can you afford? There is no sense in tying yourself up in a loan that will squeeze out your profits and bleed your business dry. It does not benefit you to take on debt that cannot be repaid.

5. What can you use as security for the loan? A loan is a risk, and the bank needs to make sure that they can get their money back. You need to present your personal guarantee to repay the loan and collateral. Your goal is to convince the banker of the value of your collateral.

Of course, don't forget to present that all-important written business plan explaining in detail your business objectives, projected earnings for the next one to three years, marketing strategy, and other relevant information. Be sure your marketing strategies are outlined in detail to lend credence to your sales projections.

In addition to your business plan, you need to support your loan application with numbers - preferably good ones. Part of that homework is to gather the financial data that will enable you to prove to lenders that you are a good credit risk. In short, this entails putting together a credit history that includes the following:

Personal financial statement listing your assets and liabilities
A list of all credit cards and their current balances
All outstanding loans, including original balances, amounts outstanding, and current monthly payments
Total monthly mortgage or rent payments
Net monthly income from your home-based business, an outside job or other sources
Checking and savings account balances
The value of your automobile(s), including original cost, balance owed, and current monthly payments
The current value of all property, including real estate, stocks and bonds
Getting a loan is going through a hard road. Bankers need to be sure that they are not taking inordinate risks with you. Your role as the loan applicant is to convince the bankers that you and your business are good credit risks.